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S.Korea to guarantee income to rice farmers
Seoul, Nov 11, 2004
The South Korean government said Thursday that it will guarantee an appropriate level of income for the country's rice farmers independent of ongoing discussions to further open the domestic market to outside competition.

The government's new income stability plan for rice farmers would provide direct subsidies to farmers if a "gama" or 80-kilogram sack of rice falls below a set level that will be updated every three years, Agriculture Minister Huh Sang-man told a press conference.

"The measure outlines the government's commitment to help farmers and the country's agricultural sector," Huh said.

It is also aimed at helping increase the number of dedicated farmers working on large-scale paddies that can produce more high-quality rice.

Huh said the price set by the government for the first three years is 170,000 won (US $153), the average price of rice at the production level in the 2001-2003 period.

"If the price of rice at the farming level falls below this for whatever reason, the government will take action to make up most of the difference," he said.

The plan calls for the government to give a fixed 600,000 won per hectare of rice land tilled as the basis for the calculation, and more if the price of rice falls below the "set price" for an 80-kilogram sack.

"Under this scheme, if rice prices fall by 5 per cent in the next three years compared to the 2001-2003 average, farmers will be able to receive money that is equivalent to 98.2 per cent of 170,000 won," the minister explained. For a 10 per cent drop, which he said was unlikely, a farmer would receive around 97 per cent of the set government price.

The measure comes as the government is expected to announce results of talks carried out with other countries such as the United States and China on ways to further liberalize South Korea's rice market. The government said a hearing will be held Wednesday, although there could be a delay.

Under the 1994 Uruguay Round agreement, the country is required to complete negotiations with other World Trade Organization member nations for further opening of its rice market by the end of 2004.

The country can either be granted an extension of its present right to limit rice imports to a certain percentage of the domestic market or switch to a tariff system.

The minister said that instead of roughly 15 per cent of rice growers being allowed to sell crops to the government at set prices, the new plan allows almost all rice farmers who harvested 33.7 million seok, or 485 million tons, of rice last year to receive support. One seok equals 144 kilograms.

This will coincide with the government's planned introduction of a public rice reserve system to cope with emergencies and ensure a degree of independence.

Kim Young-man, director general of the ministry's Food Grain Bureau, said a slight discrepancy may occur between set prices and what farmers will get if the price of rice falls sharply. Farmers should be able to overcome this, he said, by raising competitiveness through marketing, such as appealing to consumer demand for rice grown with little or no fertilizer. Kim said that in the present form, the government's set price will not move with consumer inflation gains.

The policymaker said that this system will give local farmers at least another 10 years to prepare for a more open rice market.

In addition, the new plan calls for strengthening the agriculture sector by increasing the amount of rice that can be threshed at on-site agriculture cooperatives from 6 million to 11 million seok, which will allow more efficient processing.
MGR Archive 11.11.2004
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